24/7 Media Continues to Reduce Offerings
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In its ongoing effort to trim the fat and raise money to fund continuing operations, Web ad network 24/7 Media is selling its AwardTrack unit to a North Carolina firm for an undisclosed amount.
Terms of the arrangement between Charlotte-based Pass Privilege and 24/7 Media were kept mum, though the firms said the New York-based online ad firm will cede the technology behind AwardTrack, a private-label loyalty program provider.
Intended as a customer retention tool, AwardTrack's ASP-based model enables marketers to issue and track points, provide a redemption catalogue with fulfillment that could include client merchandise or products, and generate reports. AwardTrack's clients retain ownership of the data collected from consumers.
24/7 Media only acquired the firm last February, for about $75 million in stock. But as with last week's sale of Sabela Media -- another acquisition from early 2000 -- 24/7 Media is cutting costs to reduce cash burn and focus its technology lineup on its 24/7 Connect ad server.
Monday's sale emerged from an earlier agreement with Pass Privilege, which provides consulting services and specializes in promotions, loyalty programs and relationship marketing. In November, Pass Privilege signed on as an AwardTrack reseller, an agreement that added an established technology platform to its loyalty program consulting services.
Now, the AwardTrack acquisition gives Pass Privilege greater control of the package, according to the company's president, Brian Marvin.
"This technology will compliment our robust relationship marketing and consulting services and allow us to deploy the most advanced, comprehensive, real-time software solution in the loyalty arena," Marvin said.
The sale had been expected; in recent months, the company has had to sell large portions of its investment portfolio and reduce staffing levels to cut its burn rate. In addition to cutting money-losing areas of the business, slimming down also helps 24/7 concentrate its efforts on its high-margin Connect business.
In March, the firm missed its fourth-quarter and annual earnings by a wide margin, though it did announce a structured equity line of credit through Creon Management, a $360 million private fund managed by New York-based Rhino Partners.